Qantas goes after slice of frequent buyers' credit card spending

Qantas has set its sights on big-spending shoppers to grow its fledgling financial services business, as it switches the focus of its loyalty scheme from frequent flyers to "frequent buyers".

The airline says two-thirds of all frequent flyer points in its loyalty scheme are now earned from members spending on the ground rather than from booking flights.

Qantas made almost as much from its loyalty division last year as it did from its international airline operations. Credit:Kate Geraghty

About a third of all credit card spending in Australia is done on cards linked to its scheme, and in 2017 Qantas moved to take a bite out of the banks' lunch by launching its own Platinum and Everyday credit cards.

On Tuesday the company will launch a third credit card available only to people earning more than $200,000 a year and willing to pay a $1200 annual fee.

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Along with the highest points earn rate and points sign-on bonus of any Visa or Mastercard in the market, the airline hopes to lure customers to its Titanium card with perks including a 10 per cent discount on two Qantas bookings per year, and departure lounge invitations.

“We think this is a fairly compelling offer for our customers who are spending a significant amount on their credit cards," said Olivia Wirth, chief executive of Qantas Loyalty.

Qantas' 1000 top loyalty members all made the bulk of their points from spending, Ms Wirth said, often linking credit cards to business spending accounts.

That included one member who earned more than 30 million points last year - or roughly $30 million worth of spending on a standard Qantas-partnered credit card.

Qantas has been trying to grow its loyalty division into a unit that can generate stable earnings to counterweight its exposure to the notoriously volatile business of aviation.

The loyalty division made $372 million last year - almost as much as Qantas made from its international airline business ($399 million).

As well as financial services, Qantas has launched its own line of health and life insurance products, a food and wine club, and has partnered with other businesses including Woolworths, Red Energy and AustralianSuper to offer point earning opportunities to its almost 12 million members

“As part of our broader ecosystem, really our focus is how do you build out those opportunities for our customers to earn point at every single point in their life," Ms Wirth said.

Qantas has also monetised the data the loyalty scheme collects on members, through the marketing and analytics businesses it has invested in, Red Planet, Data Republic and Taylor Fry.

Ms Wirth would not reveal how many members had signed up to its two existing credit cards, but said they had performed well, paving the way the third card to launch.

The banks that offer the 30 or so Qantas co-branded credit cards already on the market were still important partners for the company and were not put out by Qantas' launching its own products, Ms Wirth said.

“These are very new products in the market, and we always continue to invest in our own co-branded credit cards as well, so we see the two as being complementary," she said.